We Have A Breakout!
The major indexes are
currently above their 50-day moving averages, after buyers stepped in
Monday to spark a rally off this closely watched level. Volume continues to come
in below average, with no clear accumulation or distribution evident. An absence
of significant news is also factoring into a lack of conviction seen in recent
action.
Breadth wise, New 52-week highs and lows are both
quiet, with the highs holding a slight bias. Mark Boucher‘s
Top
RS and ER List mustered 19 for Monday’s rally, just shy of the 20+ required
for a bullish bias. The
Bottom RS and ER List remains nearly nonexistent.
The good news is we had Garmin Ltd. break out to all-time highs on Monday. Stocks on our watch list are holding their ground for the
most part, though continued research fails to produce top quality names for our
lists.
From Friday’s action:
Market breadth was negative, with NYSE
declining issues over advancing issues by a ratio of 1.53, and down volume over
up volume by a 2.38 ratio. Nasdaq declining issues over advancing issues came in
at 1.43, and down volume beat up volume by a 1.68 ratio.
Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
closed -1.06%
at 8,535.39. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed -0.81% at
902.96.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed -0.60% at
1,391.85.
1,184
1,421
Declining Issues
1,863
2,013
384,146,000
499,144,000
822,014,000
799,210,000
Total
Volume
1,221,556,000
1,329,451,000
Highs
12
15
7
5
Top sectors:
Gold, Defense, Consumer, Defensive.
Watch List Action:
Having a huge upside day, Garmin Ltd.
(
GRMN |
Quote |
Chart |
News |
PowerRating) staged a breakout Monday with
volume over seven times its daily average. On Tuesday the stock traded on over
four times its average as it gave up some ground. Up until Monday the stock had
been pulling back, and it took raised earnings guidance from the company to
inspire the new breakout. This maker of navigation equipment has launched out of
its first base ever formed, and we wish it well.
Looking uglier by the day, Expedia Inc.
(
EXPE |
Quote |
Chart |
News |
PowerRating) still remains in a handle
above its 50-day moving average. This choppy price action is something we’d
rather not have, and recent distribution should keep buyers cautious.
Recent Breakouts
size=2>We monitor the action of Recent Breakouts as an indicator of
the market health for IT traders. When breakouts are acting well, this is a good
sign for the likelihood of further sustainable breakouts. When breakouts are
failing, IT traders should be even more cautious.
| color=#ffffff size=2>Company Name | color=#ffffff size=2>Symbol | color=#ffffff size=2>12 Month RS | color=#ffffff size=2>Price | color=#ffffff size=2>Price Change | color=#ffffff size=2>Average Volume | Pivot | 52-Week High |
Coach Inc. | ( COH | Quote | Chart | News | PowerRating) | 93 | 33.05 | -0.22 | 901,600 | 29.80 | 35.70 |
Garmin Ltd. | ( GRMN | Quote | Chart | News | PowerRating) | 93 | 27.99 | -0.43 | 308,200 | 23.46 | 25.80 |
Hovnanian Enterprises | ( HOV | Quote | Chart | News | PowerRating) | 87 | 33.47 | +0.27 | 666,200 | 33.56 | 40.56 |
International Game Technology | ( IGT | Quote | Chart | News | PowerRating) | 84 | 73.15 | +0.34 | 998,100 | 66.70 | 80.10 |
Stocks Forming a Handle
| color=#ffffff size=2>Company Name | color=#ffffff size=2>Symbol | color=#ffffff size=2>12 Month RS | color=#ffffff size=2>Price | color=#ffffff size=2>Price Change | color=#ffffff size=2>Average Volume | Pivot |
Expedia | ( EXPE | Quote | Chart | News | PowerRating) | 93 | 69.48 | -0.53 | 2,854,400 | 78.72 |
Ross Stores Inc. | ( ROST | Quote | Chart | News | PowerRating) | 89 | 44.53 | -0.82 | 1,075,200 | 47.34 |
Stocks Building A Base
color=#ffffff size=2>Company Name | color=#ffffff size=2>Symbol | color=#ffffff size=2>12 Month RS | color=#ffffff size=2>Price | color=#ffffff size=2>Price Change | color=#ffffff size=2>Average Volume | Pivot |
Apollo Group | ( APOL | Quote | Chart | News | PowerRating) | 85 | 40.84 | -1.05 | 2,494,900 | 44.46 |
href=”mailto:danielb@tradingmarkets.com”>danielb@tradingmarkets.com
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Intermediate-Term Traders
Report is posted on
Tuesdays and Fridays. For other intermediate-term commentary, be sure to read
Mark Boucher (Fridays),
Tim Truebenbach (Tuesdays and Thursdays), and
Gary Kaltbaum (Mondays and Thursdays).